Technical view: Gold

Technical view: Gold

by 5paisa Research Team Last Updated: 2022-05-04T16:57:23+05:30

As per the technical parameters, the precious metal is likely to consolidate with a negative bias for some more time.

Gold has remained volatile in recent times. The ongoing geopolitical tensions, accompanied by rising inflationary pressures, have led to a huge demand for safe-heavens like Gold. However, recently, the precious metal has witnessed some profit booking which has led to a fall of over 8% since its all-time high level of Rs 55558. Currently, it trades at the crucial support level of Rs 50500.

Gold trades below 20-DMA and is accelerating towards the level of 200-DMA which is at the Rs 48750 level. However, a crucial support level In the form of 100-DMA lies just above the 50000-mark, from which it can witness a pullback. Plotting a Fibonacci retracement of a down move from its all-time high level, the 38.2% of retracement level of Rs 53400 shall be the first resistance till which a pullback can occur. However, as per the technical parameters, the precious metal is likely to consolidate with a negative bias for some more time.

The 14-period daily RSI is slightly above the 40-mark and is in the sideways zone. However, a series of lower highs and lower lows have been seen and thus, RSI is indicating a loss of strength lately. The -DMI is above the +DMI and indicates a weak trend of the metal. The ADX (21.96) points sideways and is unclear about the trend. However, the MACD indicates a bearish momentum as it is below the signal line and zero line, while the KST and TSI indicators depict weakness in the metal, whereas the Elder Impulse system shows a neutral view. The yellow metal is currently trading below its 20-DMA and 50-DMA by about 2.50%. Meanwhile, the key moving averages give mixed signals about its trend.

However, keeping in mind the fragile global cues, a pullback cannot be ignored. Volumes have been recorded good lately but no conclusive pattern has been formed, thus keeping the metal in a tussle. A sharp move in either direction shall bring clarity to the trend.


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